Affordable Care Act: Deadline approaches for state, uninsured

May 26, 2013

Kenneth Marrero of New Rochelle is among the many people who work full time but cannot afford health insurance. Marrrero is seen May 14 outside his job, at Honda in New Rochelle. / Carucha L. Meuse/The Journal News

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Howard Hellman, owner of All Bright Electric in West Nyack, is uncertain how the Affordable Care Act will affect his business. Hellman, seen Monday, provides health insurance for his employees. / Seth Harrison/The Journal News

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Important dates

July 15: The state expects to announce which plans will be available and how much they will cost. September: Start of a two-year, $40 million advertising campaign about the insurance exchanges. Customer service centers open and navigators start. Oct. 1: Exchanges open. Jan. 1, 2014: Health insurance plans take effect.

Editorial Spotlight

At 11 a.m. Thursday, an Editorial Spotlight interview will focus on New York’s Health Benefit Exchange. Details of New York’s exchange, including which plans will be available and how much they will cost, are due to be released July 15. A panel of experts will explain the purpose of the health exchange, and how New York’s insurance “marketplace” will work, who it will benefit and more. To view the session and join the live chat, go to www.lohud.com/

editorialspotlight; to make a comment in advance, reach us via Twitter @lohudopinion or email Digital/Social Media Editor Brian Howard at

bjhoward@lohud.com.

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There’s a clock counting down the time, to the second, before New York’s health insurance exchange opens Oct. 1 — putting the state, like the rest of the nation, into a massive health-reform experiment that has been debated for years.

That clock is on the website of the state agency running the exchange. But a lot of other information isn’t there: How much will the policies cost? What benefits will be covered? Who is eligible, and how do you sign up?

In the coming months, many New Yorkers will be asked to make choices they have never made before as the long-awaited Affordable Care Act is put in place.

“We will open our doors on Oct. 1,” said Danielle Holahan, deputy director of the New York Health Benefit Exchange. “We are going to be ready.”

That might come as a surprise to many. A recent Kaiser Family Foundation poll showed that 40 percent of people nationwide do not know President Barack Obama’s health-care law — or Obamacare, as it is often referred to — is being implemented.

Most people who have insurance through their jobs — especially if they work for larger employers — likely will not be directly affected by the exchange. But other parts of the law, such as rules against refusing coverage to people with pre-existing conditions, will affect everyone.

For the estimated 2.6 million people in New York who don’t have health insurance, including 75,000 in the Lower Hudson Valley, implementation of the exchange is significant.

“Certainly for a lot of people who don’t have coverage, this can be a wonderful thing,” said Deborah Marshall, a vice president at Good Samaritan Hospital in Suffern and a member of the Health Benefit Exchange regional advisory committee. “But it’s still the unknown, and many people are concerned about the transition from where we are today to where we’ll be tomorrow.”

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A new marketplace

The exchanges are online marketplaces where people can shop for insurance, get information about prices and subsidies, and be directed to other resources, like expanded Medicaid programs. Help also will be available via telephone and in person through customer service assistants called “navigators.”

New York hopes to have one trained navigator available in each county to assist people in person, Holahan said.

The Affordable Care Act requires states to create their own insurance exchange or enter into an exchange operated by the federal government. Experts predict 1.1 million people statewide will use New York’s exchange — 58 percent of them individuals and 42 percent businesses.

Kenneth Marrero, 21, of New Rochelle could be among them.

Like many of the uninsured, Marrero works full time. His employer offers a group plan, but at nearly $500 a month, he can’t afford it.

Many young people like Marrero try to do without insurance, figuring at their age, they won’t need much care.

But more than a year ago, Marrero’s luck gave out. He needed heart surgery and ran up bills so high he doesn’t even know the total. He was able to whittle the amount after working with the hospital, which gave him a big discount because he lacked insurance. Even so, he’s still paying it off.

“I’ll be in debt for the rest of my life,” he said.

When the exchange opens, Marrero will have his choice of plans that will cost him about $83 monthly, according to a calculator created by the Kaiser Family Foundation that estimates premium cost based on income and subsidies.

His health insurance will be heavily subsidized. The total cost of the plan will be $3,018. But Marrero will be eligible for a $2,019 tax subsidy, which will cover 67 percent of the premium. His annual share will be $999 — or $83.25 monthly.

Like Marrero, more than 1.5 million New Yorkers will be eligible for premium tax credits in 2014. That includes people with an annual income of up to $94,200 for a family of four. Individuals who lack health insurance face a $95 annual tax penalty.

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Business concerns

Businesses, especially smaller employers, are still unclear on whether the exchange and health-care reform in general will do anything to ease their ever-increasing bill to provide workers with insurance.

“I worry about any additional costs,” said Howard Hellman, owner of All Bright Electric in West Nyack, a contracting company with 100 employees. “It puts more pressure on us, and then we have to pass those costs along to our customers.”

Health-care reform won’t do much for a group that commonly lacks insurance: undocumented workers. Hospital leaders fear that people without documentation still will flock to expensive emergency rooms with no way to pay the bills.

Some people are convinced the Affordable Care Act will fail to provide broader health coverage and make health care more affordable. A similar plan enacted in Massachusetts in 2006 has succeeded in expanding coverage to nearly everyone, but it has not yet been as successful in bringing down medical costs.

Regardless, the time to make people in New York aware of their new options is growing short.

“It’s May already,” said White Plains attorney Michael LaMagna, who teaches health-care law at Long Island University and has a degree in health-care administration. “The people who need the information don’t have it. You can’t just flip the switch on Oct. 1 and expect them to enroll if they don’t know where to go or how to access it.”

Simon Bukai is betting that those navigators won’t provide enough help for everyone, especially small businesses and mom-and-pop operations that enter the exchange. That’s where Bukai is hoping his Suffern insurance brokerage business comes in.

Individuals and employers — especially small businesses — will need his help making their choices, he said.

“It is still going to be complicated, especially for sole proprietors and small businesses,” he said.

Will costs fall?

In New York, from 2000 to 2009, health insurance premiums jumped on average 92 percent while median earnings increased only 14 percent.

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The gap between the cost of premiums and the average paycheck has left health insurance beyond the reach of many working people — leading to political pressure to reform the system.

Myra Smith was paying $400 monthly for her family’s health insurance and had to dip into her savings to foot the bill once she lost her job. Her two college-age children were able to get on other policies and they have coverage. The New Rochelle resident is also paying off numerous student loans for her children and herself.

Once the exchange opens, she will be eligible for coverage. But it likely will cost her about $475 monthly, according to the Kaiser Family Foundation calculator.

“There’s no way I can pay that,” she said.

Health insurance is still too much for many people to afford, said Georganne Chapin of Upper Nyack, a regional advisory committee member and chief executive of Hudson Health Plan in Tarrytown.

“We have not improved the health-care delivery system,” she said. “All we have done is forced people to buy insurance. And we’re patting ourselves on the back for health-care reform.”

State and federal officials are counting on competition among plans on the exchange to bring down costs.

In New York, insurers have put in bids to operate on the exchange. Holahan declined to say how many insurers applied but said she was “pleased” with the response. The rates will be set over the summer.

Holahan said the exchanges will go a long way toward helping people in New York afford health care.

New York’s health insurance exchange cost $370 million to set up, funds that came from the federal government, Holahan said. One-third of that was spent on a new computer system, another third on hiring customer service, 17 percent on staff and 11 percent on advertising, she said.

The state awarded a contract to a private company to operate call centers in New York City and Albany, which will employ 360 people in 2013, increasing to 620 in 2014, Holahan said.

Still, many question whether the new system will work at all.

“The exchange has so many details to work out,” said Greg Chartier, a Westchester human resources consultant. “And we still don’t know the prices. If it doesn’t cost less than what we’re paying now, it’s useless.”